04:02 PM EST, 02/03/2025 (MT Newswires) -- Apple ( AAPL ) will likely see a limited earnings impact from the 10% tariffs imposed by the Trump administration on Chinese imports, BofA Securities said Monday.

The iPhone maker could see a roughly five-cent headwind to earnings per share in both 2025 and 2026, according to the research report. That estimate assumes 80% of devices can be sourced outside of China, according to the BofA Securities analysis.

The brokerage reiterated its 2025 revenue target at $411.24 billion. Analysts surveyed by FactSet are modeling $409.71 billion in the ongoing year. Shares of Apple ( AAPL ) closed 3.4% down on Monday.

The impact from the tariffs will likely be manageable with a "limited impact on earnings," according to BofA Securities analyst Wamsi Mohan. The brokerage reiterated a buy rating and $265 price target on the stock, pointing to Apple's ( AAPL ) stable cash flows, earnings resiliency and potential beneficiary of artificial intelligence use on edge devices.

If Apple ( AAPL ) were to raise prices in the US, it could fully offset the tariff effect in 2025 and create a penny of upside in 2026, the research showed. A 3% price increase in the US would be able to offset the impact, according to Mohan. Though in that case, the company might sell roughly 5% fewer units in the US, the report showed.

Most iPhone models can now be manufactured in India. Apple's ( AAPL ) manufacturing partners could ramp up production in India for US shipments, while the same could be done in countries such as Vietnam and Malaysia for other Apple ( AAPL ) products, according to the BofA report.

If only 50% of devices can be sourced elsewhere, the EPS impact would range from $0.07 if Apple ( AAPL ) raises prices to $0.12 if it chooses not to, the research report showed.

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